Appellant partially wins deduction for 2004-05 but loses for 2005-06 due to lack of completion certificate.

The Tribunal allowed the appellant's claim for deduction under Section 80IB(10) for the assessment year 2004-05 but upheld the disallowance for the assessment year 2005-06 due to the appellant's failure to obtain the required completion certificate. The appeals were partly allowed for 2004-05 and dismissed for 2005-06.

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Issues Involved:
1. Validity of initiation of reassessment proceedings under Section 147 by issuing notice under Section 148.
2. Entitlement of the appellant for the deduction under Section 80IB(10) of the Income Tax Act for the assessment years 2004-05 and 2005-06.
3. Compliance with the basic conditions for claiming deduction under Section 80IB(10).
4. Adequacy of the opportunity provided by the CIT (Appeals) to the appellant before making a decision.

Issue-wise Detailed Analysis:

1. Validity of Initiation of Reassessment Proceedings under Section 147 by Issuing Notice under Section 148:

The appellant contended that the reassessment proceedings initiated under Section 147 by issuing notice under Section 148 were invalid. The Assessing Officer (AO) had reopened the assessments based on the information obtained during the subsequent assessment proceedings for the year 2006-07, which indicated that the appellant had not completed the construction of the housing project within the specified period under Section 80IB(10). The CIT (Appeals) upheld the reopening of the assessments, noting that the notices under Section 148 for both assessment years were issued before the expiry of four years from the end of the assessment years, thus the proviso to Section 147 was not applicable. The Tribunal found no infirmity in the CIT (Appeals)'s order, validating the reopening of the assessments.

2. Entitlement of the Appellant for the Deduction under Section 80IB(10) of the Income Tax Act:

The appellant argued that the condition for completion of the housing project within four years was prescribed by the Finance (No. 2) Act, 2004, with effect from 1.4.2005, and thus should apply only from the assessment year 2005-06 onwards. The CIT (Appeals) disagreed, holding that since the appellant did not obtain a completion certificate by 31st March 2008, the deduction under Section 80IB(10) was not allowable. The Tribunal concurred with the CIT (Appeals), confirming the disallowance of the deduction for the assessment years 2004-05 and 2005-06.

3. Compliance with the Basic Conditions for Claiming Deduction under Section 80IB(10):

The appellant claimed to have fulfilled all basic conditions for the deduction under Section 80IB(10), including submitting relevant evidence. However, the CIT (Appeals) and the Tribunal noted that the appellant failed to obtain a completion certificate from the local authority by the specified date, which was a pre-condition for the deduction. The Tribunal emphasized that as per the provisions applicable from 1.4.2005, obtaining a completion certificate was mandatory.

4. Adequacy of the Opportunity Provided by the CIT (Appeals) to the Appellant:

The appellant argued that the CIT (Appeals) did not provide a proper opportunity before taking a contrary view and disallowing the claim under Section 80IB(10). The Tribunal did not find merit in this argument, as the CIT (Appeals) had based the decision on the appellant's failure to meet the statutory requirement of obtaining a completion certificate.

Conclusion:

The Tribunal allowed the appellant's claim for deduction under Section 80IB(10) for the assessment year 2004-05, as the requirement for a completion certificate was not applicable for that year. However, for the assessment year 2005-06, the Tribunal upheld the disallowance of the deduction due to the appellant's failure to obtain the required completion certificate. The appeals were thus partly allowed for the assessment year 2004-05 and dismissed for the assessment year 2005-06.

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